Why Debt Stinks: Every Windfall Is Already Spoken For
I read Paid twice every day and she often inspires me. Today Her topic really hit a nerve. It is the main reason I chose to get out of debt. My grandmother passed away last summer. My mom started talking about giving us some of the money she will inherit. It was a very generous offer but something about it nagged at me. Mom said wont it help you get out of debt? Gulp, it left such a sour feeling in my stomach. Something just wasn't right about spending my inheritance on debt. Stuff that is already long long gone. I wanted it to help me have a down payment on a home. I do not want to pay for my stupid tax. I wallowed in different plans for a while. I said I was getting motivated but I did allow new charges on my cards I thought I could make progress that way. HA! In Jan I started hitting the plan hard. New real commitment. I gathered steam and decided no more credit card charges. To this point I have paid off 12%. I wanted to give myself inspiration and I was not able to show progress yet. It is still a little too early in the month. Since I cant tell myself how much progress I have made lately. I decided to check the budget for a mid month check. We are mostly on track to recover in April from the additional $537.81 we were in the hole. There were actually $1094 additional expenses but the tax refund covered the majority of that. This month the money flows continue... She needs a dress, she needs shoes to match the dress she is attending two proms. UGH it goes on and on.
My windfalls saved my emergency fund last month. I have to brush myself off this month I have to say hey girl you fell down last month but you can do this. I have been worried about what am I going to do when the child support ends (Next month) and Big news I am pregnant. How can I afford this baby and still pay off my debt. I am determined to pay off this debt. I will not bring another child into this world in debt. I am going to get out of debt.I want to be lean goal oriented performer. I am on the plan. I am on track but I want to make more traction. How do I do it?
The $600.00 from the gov is going $400.00 for vacation and $200 to debt
My Original plan was to put all of the tax rebates $431 & 141 & 600 towards debt. By using the windfall to recover from march madness I miss out on putting a dent in the debt. But wait... I can hear my mom's voice saying don't beat yourself up look at how far you have come. Look at what you have been able to do in 3 months. That progress wont go away. Take a breath and know that God is with you on this journey.
I feel like a trader... I am trading this debt for the Fed return I am trading this debt for the state return and I am trading the emerg fund for the $600 rebate. All windfalls I could have used to get more traction with. I guess its allowing me to stand in place and not slide backwards but still I want some traction!
Things to say when you are grumpy about money...
Unless you have the money I am not doing this, or buying this.
I am 41 I can say no.
Monday, April 21, 2008
Thursday, April 17, 2008
Bottomed out
The bottom out point was $582.85 to my checking account. That was the lowest balance I hit. I'll have to pay a service fee for it going below the minimum but still. Not too bad all things considered. The minimum balance is $800.00 I round it up and keep $1000.00 so its easy math. Also for really bad months like march. I'll finish the budget and and post this weekend. Fiancée has been so Awesome. Because I had a bad month last month I have yet to have paid a single dollar to the grocery store this month. What a sweet guy.
I am not a financial professional. If you are looking for financial advise you should seek it elsewhere. If you would like to join me on the journey, walk with me for a while and be my friend......
I am not a financial professional. If you are looking for financial advise you should seek it elsewhere. If you would like to join me on the journey, walk with me for a while and be my friend......
Friday, April 11, 2008
Follow through
One behavior I have learned (by paying stupid tax) is to follow up on a balance payment. For some reason one of the banks I have a card with always messes me up with its payment schedule. I have learned to send the minimum payment even though I just made a balance transfer. This particular card has been a thorn in my side. The Credit Card company raised my rates for no apparent reason. Then they lowered my limit. (I never made a late payment on any of my cards.) So as soon as I could I transferred all my money off those cards and waited. Well Don't cha know within 6 months they offered me a 4.99% transfer rate until the balance is paid. I crunched those numbers and saving $1000.00 is in my interest. I know Dave Ramsey wants me to feel like I am making traction but I am tracking that in the over all total not card by card. (Current paid to date is $4789.57 - see my NCN Chart.) Frankly it feels Awesome to have gone from $ 12,049.90 to $ 2,943.06 even if the progress is in reduced interest not over all amounts.
So follow through... I double checked the card that was getting the paydown. Monthly payment rc'd - Check. I double checked the card that I was adding the balance to. Balance transferred. Check. Now this card had a $ -83.26 balance. When I transferred a balance from this card previously there was an additional payment that crossed in the mail. I have been waiting to pounce on that negative amount for 4 months. I am quite a program running some actuarial table somewhere that said "nope no change in the rate"... So I waited... "nope dont drop the rate"..... so I waited..... "nope dont drop the rate"... so I waited. Ahhhh then the offer and I pounced. Of course if the rate were to change at any moment I would YANK the balance off this card and move it somewhere else. I hate this card that much. Just so you know I dont recommend this method for everyone. The fees do add up and despite the fact I have just moved two balances recently it is not something I do on a regular basis. I wanted to use that $ -83.26 to pay off my debt. And it did help me. The balance transfer for this card cost.... $ 6.74 ($ 90.00 - $ 83.26 = $ 6.74) Hooray me. I will also make the first payment before 04/22/08 (the closing date on the statement). That way I will be ready to roll when the beginning of the month rolls around again. So the balance on card #7 is $ 3,006.74
Don't panic all you Ramseyites. I am working the debt snowball. I am not putting any new charges on my cards. I just wanted to take advantage of the credit card shuffle to save myself some money. I know just because I finally can move things around does not mean I can spend money. Believe me I get it. I want out of debt as fast as I can git. I am even trying to plan to get a second job and pay down more. On a positive note I also got my State tax refund today. Its staying in the checking account helping to fight back from the deep deep deficit of spending in March.
I am not a financial professional. If you are looking for financial advise you should seek it elsewhere. If you would like to join me on the journey, walk with me for a while and be my friend......
So follow through... I double checked the card that was getting the paydown. Monthly payment rc'd - Check. I double checked the card that I was adding the balance to. Balance transferred. Check. Now this card had a $ -83.26 balance. When I transferred a balance from this card previously there was an additional payment that crossed in the mail. I have been waiting to pounce on that negative amount for 4 months. I am quite a program running some actuarial table somewhere that said "nope no change in the rate"... So I waited... "nope dont drop the rate"..... so I waited..... "nope dont drop the rate"... so I waited. Ahhhh then the offer and I pounced. Of course if the rate were to change at any moment I would YANK the balance off this card and move it somewhere else. I hate this card that much. Just so you know I dont recommend this method for everyone. The fees do add up and despite the fact I have just moved two balances recently it is not something I do on a regular basis. I wanted to use that $ -83.26 to pay off my debt. And it did help me. The balance transfer for this card cost.... $ 6.74 ($ 90.00 - $ 83.26 = $ 6.74) Hooray me. I will also make the first payment before 04/22/08 (the closing date on the statement). That way I will be ready to roll when the beginning of the month rolls around again. So the balance on card #7 is $ 3,006.74
Don't panic all you Ramseyites. I am working the debt snowball. I am not putting any new charges on my cards. I just wanted to take advantage of the credit card shuffle to save myself some money. I know just because I finally can move things around does not mean I can spend money. Believe me I get it. I want out of debt as fast as I can git. I am even trying to plan to get a second job and pay down more. On a positive note I also got my State tax refund today. Its staying in the checking account helping to fight back from the deep deep deficit of spending in March.
I am not a financial professional. If you are looking for financial advise you should seek it elsewhere. If you would like to join me on the journey, walk with me for a while and be my friend......
Monday, April 07, 2008
Daughter lessons
Murphy came to visit my beautiful daughter. She lost her iPod Friday. She was so upset. She also got $200.00 from her dad as spending money. You know she wanted to run right out and spend that cash but this mean old mom wouldn't let her. This mom said she had to complete paying for her trip which she had already promised to pay for. She has $200.00 left to complete the trip. Then she can put money towards the iPod. Stuck to my guns I did. Oh boy getting out of debt stinks and hopefully she will realize why I am making it so tough on her now.
March Wrap up
Well as predicted March was a hard budget to balance. I have some scary new expenses coming and I think I have them covered but phew am I going to be glad when May rolls around because April is going to be TIGHT
Travel for my employer and fronting them the money puts an additional burden on me that I was not planning to have.
I also found out Saturday I am going to have a few more expenses before the end of the year so I am not too certain about getting a second job. BUT I have a plan. First tonight I talk to future hubby about the future. Then we map it out together. He likes plans he can stick to. Sept 2011 feels like a long way away. I am hoping for a second job this summer to ease the transition for no longer having child support. I am not sure that it is going to be possible. Trying to take that slow.
So I recalculated my debt snowball based on this months numbers. It is still Sept 2011 but the final payment is lower. So I am making progress. Currently I have paid down $4789.57 towards my debt. Last month I paid $691.60 to principal. This month will be much slower because of all the travel. The many hits to the "uh oh" fund and car insurance. But still I managed to keep my head above water.
While I was talking with my mom about how I did it there are probably a couple of things she asked me and I thought I should share with you.
Quick emergency cash....
I keep a $100.00 bill in my wallet at all times. Mostly so I don't get stuck in the city if something comes up. I don't want to need to use my credit card for an emergency. Which is also no longer in my wallet.
I also have kept $1000.00 in my checking account as a buffer. It is a condition of free checking. I probably dipped into it this month, we'll see when the fiancée clears the rent check. It will also depend on when I get the child support. Timing of all those things might be tricky. But I will not bounce any checks or run out of money. I currently think I am down to about $600.00 So I have to replenish that money. I will use the expense reimbnursement check that is $350.00 and another pay check. I should have it covered. I didnt have to dip into savings for the car insurance at all! That to me is the most impressive.
I am also trying to build up a $2000.00 emergency fund. Right now the savings account is at $1200. I do put $65.00 in every month for car insurance so I can take it out and save a little on the monthly vs every 6 month payments. So far I have been able to cash flow the insurance when it comes up. I have not needed to dip into savings. I am not sure this month that I will be able to put much aside though. I think I might have to use those funds to replace all the crazy funding I have had to do in March.
All in all, even though I got bitten quite hard in the month of march with expenses I was not expecting to pay, I was still able to recover. And I am ready for whatever April has to bring. I think. I don't want to tempt fate. I really have had enough of those Murphys' and they need to knock on someone else's door.
I feel have made a lot of progress in my life. (My mom agrees... LOL) Here are the things I have done today:
I checked a balance on line with a credit card company and discovered my credit had improved. So I was able to transfer a balance to another card. This takes one additional month off the debt payment plan. So the new date to be debt free is Aug 2011. I am so so happy. I feel like I am really making inroads on this debt. I have paid off 12% of my debt. This is BIG! At weight watchers when you reach 10% weight loss you get to stand up and cheer. So here is me I have lost 10% of my debt and I am cheering! Hooray!I will save approx $1700 in interest by transferring the balances. Heck yea 1 month earlier and $1700 less in interest. Go baby go. Card # 1 which started at $12,049.90 is down to 6378.06. Less the payment of $435 I made today Less a balance transfer of $3000. SO.... The new balance is $2943.06 . Now that is before interest next month. And the reason I focused so hard on this card is because it is currently 27.99 interest. GAG ME! I updated the Progress bar for card #1 to be 52% although in reality tracking the individual cards when you are transferring the balances is a mis-nomer. The real progress is reflected in the $39,804.12 number. I have paid it down 12% to date and I made the monthly payments today so we'll get new numbers for the end of April. LOL I actually get geeked out about doing my bills now. Its exciting to see the progress. I have become the cheapest mama on the block!
Travel for my employer and fronting them the money puts an additional burden on me that I was not planning to have.
I also found out Saturday I am going to have a few more expenses before the end of the year so I am not too certain about getting a second job. BUT I have a plan. First tonight I talk to future hubby about the future. Then we map it out together. He likes plans he can stick to. Sept 2011 feels like a long way away. I am hoping for a second job this summer to ease the transition for no longer having child support. I am not sure that it is going to be possible. Trying to take that slow.
So I recalculated my debt snowball based on this months numbers. It is still Sept 2011 but the final payment is lower. So I am making progress. Currently I have paid down $4789.57 towards my debt. Last month I paid $691.60 to principal. This month will be much slower because of all the travel. The many hits to the "uh oh" fund and car insurance. But still I managed to keep my head above water.
While I was talking with my mom about how I did it there are probably a couple of things she asked me and I thought I should share with you.
Quick emergency cash....
I keep a $100.00 bill in my wallet at all times. Mostly so I don't get stuck in the city if something comes up. I don't want to need to use my credit card for an emergency. Which is also no longer in my wallet.
I also have kept $1000.00 in my checking account as a buffer. It is a condition of free checking. I probably dipped into it this month, we'll see when the fiancée clears the rent check. It will also depend on when I get the child support. Timing of all those things might be tricky. But I will not bounce any checks or run out of money. I currently think I am down to about $600.00 So I have to replenish that money. I will use the expense reimbnursement check that is $350.00 and another pay check. I should have it covered. I didnt have to dip into savings for the car insurance at all! That to me is the most impressive.
I am also trying to build up a $2000.00 emergency fund. Right now the savings account is at $1200. I do put $65.00 in every month for car insurance so I can take it out and save a little on the monthly vs every 6 month payments. So far I have been able to cash flow the insurance when it comes up. I have not needed to dip into savings. I am not sure this month that I will be able to put much aside though. I think I might have to use those funds to replace all the crazy funding I have had to do in March.
All in all, even though I got bitten quite hard in the month of march with expenses I was not expecting to pay, I was still able to recover. And I am ready for whatever April has to bring. I think. I don't want to tempt fate. I really have had enough of those Murphys' and they need to knock on someone else's door.
I feel have made a lot of progress in my life. (My mom agrees... LOL) Here are the things I have done today:
I checked a balance on line with a credit card company and discovered my credit had improved. So I was able to transfer a balance to another card. This takes one additional month off the debt payment plan. So the new date to be debt free is Aug 2011. I am so so happy. I feel like I am really making inroads on this debt. I have paid off 12% of my debt. This is BIG! At weight watchers when you reach 10% weight loss you get to stand up and cheer. So here is me I have lost 10% of my debt and I am cheering! Hooray!I will save approx $1700 in interest by transferring the balances. Heck yea 1 month earlier and $1700 less in interest. Go baby go. Card # 1 which started at $12,049.90 is down to 6378.06. Less the payment of $435 I made today Less a balance transfer of $3000. SO.... The new balance is $2943.06 . Now that is before interest next month. And the reason I focused so hard on this card is because it is currently 27.99 interest. GAG ME! I updated the Progress bar for card #1 to be 52% although in reality tracking the individual cards when you are transferring the balances is a mis-nomer. The real progress is reflected in the $39,804.12 number. I have paid it down 12% to date and I made the monthly payments today so we'll get new numbers for the end of April. LOL I actually get geeked out about doing my bills now. Its exciting to see the progress. I have become the cheapest mama on the block!
Tuesday, April 01, 2008
March Money Madness
Well it has been a long road this month. I will do a budget recap probably this weekend. Today I want to talk about graduation and college insanity which took place this past week. There were two forces at work on me last week. One was work and one was my family. I have never been able to travel for work in my life. When I was offered the opportunity to attend training I was excited to go. I knew pretty far in advance and gave my travel dates to my daughter and fiancée. It was not too big a deal she is a senior in high school and the pair get along most of the time. We created a plan. I was to travel to the training. On Thursday I would meet them in NC and we would then go together to a freshman registration weekend at the college my daughter is planning to attend. Great. I felt confident leaving things in my fiancée's hands and I felt my daughter would have the chance to have a little fun too.
Monday I flew to the training location. Fiancée had hurt his back. Oh boy. I was already wishing I could turn around and go home to be there for him. Tuesday he let me know that there was no way he could travel down with the daughter for the college weekend. Drat. Okay, So I hopped on line and found a cheep airline ticket for her to meet me at the airport and we would drive together to the college event. Hmmm... but wait... how would we drive? Well my dad lives not to far away... Oh no, the beloved basketball team is playing tonight. Drat. and I am going to need to get from the hotel to the college. Okay rent a car.
Now I should interject here that I have not put a single new charge on my credit cards since January. I am RESOLVED to be out of debt. So I did not take a credit card with me on the trip. I had enough coverage in my checking account to handle the trip. I have been holding a small sum waiting on the car insurance to tell me how much the insurance would be. So as I went off to training I thought I was covered. I was really resolved not to put any new charges onto plastic.
Oh but Murphy's law..... when something can go wrong it will go wrong. And so Murph dog came to visit me. First the additional plane ticket. Plus the planned expense of the hotel for the college weekend. Then the rental car. The freshman sign up weekend cost me are you ready..... $770.48. Oh its true. GULP where on earth am I going to get funding for that?
The travel out of pocket costs are $360.58. This money I will get back but companies are very slow to pay, which is why I did not want to put it on a credit card and have to front the interest. No thank you. So I have not yet figured out if March comes out even. I will pull all the numbers together.
On a side note. I had been missing listening to Dave Ramsey on my laptop while I go to sleep. (I like to listen to the archives) As I was catching up yesterday he had TWO callers ask about credit cards for traveling. He unequivocally stated that NO, you do not use credit for travel. Build up a small reserve and let it fly. Man am I glad I had that small cushion this week. This is why my goals for an emergency fund are $2000.00 not $1000.00 I just need a little more cash flow then the average bear with a teenage daughter.
Well I am really proud of myself this week. I was so nervous about needing to use the plastic. But I did it I stuck it out and I resisted the temptation to use that crutch. Yea HOO!
Monday I flew to the training location. Fiancée had hurt his back. Oh boy. I was already wishing I could turn around and go home to be there for him. Tuesday he let me know that there was no way he could travel down with the daughter for the college weekend. Drat. Okay, So I hopped on line and found a cheep airline ticket for her to meet me at the airport and we would drive together to the college event. Hmmm... but wait... how would we drive? Well my dad lives not to far away... Oh no, the beloved basketball team is playing tonight. Drat. and I am going to need to get from the hotel to the college. Okay rent a car.
Now I should interject here that I have not put a single new charge on my credit cards since January. I am RESOLVED to be out of debt. So I did not take a credit card with me on the trip. I had enough coverage in my checking account to handle the trip. I have been holding a small sum waiting on the car insurance to tell me how much the insurance would be. So as I went off to training I thought I was covered. I was really resolved not to put any new charges onto plastic.
Oh but Murphy's law..... when something can go wrong it will go wrong. And so Murph dog came to visit me. First the additional plane ticket. Plus the planned expense of the hotel for the college weekend. Then the rental car. The freshman sign up weekend cost me are you ready..... $770.48. Oh its true. GULP where on earth am I going to get funding for that?
The travel out of pocket costs are $360.58. This money I will get back but companies are very slow to pay, which is why I did not want to put it on a credit card and have to front the interest. No thank you. So I have not yet figured out if March comes out even. I will pull all the numbers together.
On a side note. I had been missing listening to Dave Ramsey on my laptop while I go to sleep. (I like to listen to the archives) As I was catching up yesterday he had TWO callers ask about credit cards for traveling. He unequivocally stated that NO, you do not use credit for travel. Build up a small reserve and let it fly. Man am I glad I had that small cushion this week. This is why my goals for an emergency fund are $2000.00 not $1000.00 I just need a little more cash flow then the average bear with a teenage daughter.
Well I am really proud of myself this week. I was so nervous about needing to use the plastic. But I did it I stuck it out and I resisted the temptation to use that crutch. Yea HOO!
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